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Underdog Days

The big guys couldn't take the heat--can you rise to the occasion?

Even after two big-name toy stores closed their doors in their Brookline, Massachusetts, community, young parents Eli and Sheri Gurock believed they could make a brick-and-mortar toy store work. Not wanting local parents and children to lose the age-old joy of walking out of a toy store with a brand-new toy, the pair set out to succeed where the big boys had failed.

Knowing they had to set their startup apart from the toy behemoths, the Gurocks founded Magic Beans in 2004 and included a baby section. The idea was to get expectant parents (and their friends and family) into the store to shop for baby necessities long before the baby is born to plant the seed that this is also a great place to buy toys after the child is born. "We can capitalize on holidays and Christmas, but when it's slow, we can sell our baby stuff, which is [good] business all year long," says Eli.

That's just the strategy a startup should use when trying to succeed where big companies have struggled. Bring something new to the table, says Vince Crew, founder of Reach Development Services, a strategic growth services firm. "There's no magic solution. You have to be first, cheap or different." Price matters, but the differentiation, be it a more targeted product offering or a more specialized service, will bring clients to your re-imagined business.

Play up your of-the-community vibe, too, says Crew. "Everyone wants to do business with the neighbor." Let your clients know they won't have to navigate big-business bureaucracy, but will instead get personalized customer service from the start.

"Follow through on servicing the customer before, during and after the sale," says Crew. The customers at Magic Beans get old-fashioned excellent customer service from Eli, 30, Sheri, 31, and their team.

With three stores in Massachusetts as well as a web presence, company sales are in the seven figures. "Don't feel intimidated that you can't provide the same level of polish and consistency that a big company can," says Eli. "You can be better just by being smart and creative."

This story appears in the April 2008 issue of Entrepreneur. Subscribe »